e-payments Electronic Payment Transactions Veterans Health Administration s Award-winning Project Pays Off

Transcription

1 e-payments Electronic Payment Transactions Veterans Health Administration s Award-winning Project Pays Off Presented by Barbara C. Mayerick Director, Business Development Chief Business Office Veterans Health Administration U.S. Department of Veterans Affairs

2 Bottom Line Faster payment receipt 43% improvement with Electronic Funds Transfer Time savings in Accounts Receivable and related business operations 64% improvement

3 Overview HIPAA and ETCS VA The Context Drivers VA Strategic Goals What We Set Out to Do The Old Process The New Process How It s Paying Off Metrics Summary of Benefits Why the Project Worked Next Steps

4 HIPAA Health Insurance Portability and Accountability Act of of 1996 Title II Title II II Title III III Title IV IV Title V Insurance Portability Fraud and Abuse Medical Liability Reform Administrative Simplification Tax Related Health Provision Group Health Plan Requirements Revenue Off-sets

5 Title II Administrative Simplification (AS) Privacy Security ETCS Standard Identifiers Electronic Transactions Code Sets

6 VA The Context VA is responsible for the largest centrally run health care provider system in the United States 21 Veterans Integrated Service Networks (VISNs): 1,100+ care facilities 163 hospitals 850 ambulatory care & outpatient clinics 137 nursing homes 43 domiciliary facilities

7 VA Τhe Context Public Laws enacted in 1986 and 1990 gave VA authority to seek reimbursement from third-party insurers for the cost of veterans nonserviceconnected health care In 1987 VHA began a Medical Care Collections Fund program which, today, uses funds collected to reimburse the cost of veterans health care

8 VA Τhe Context Annually, VA submits an estimated 10 million reimbursement claims To 1,675 Payers

9 Drivers VA Strategic Goals Explicit goal of Secretary of Veterans Affairs Ensuring that business process enhancements are converted from paper to electronic medium. Anthony J. Principi, Secretary of Veterans Affairs FY Strategic Plan VHA Chief Business Office: proactive transition to e-business And, of course, HIPAA Electronic Transaction requirements

10 What We Set out to Do 5 e-business Projects FY 2003 and 2004 e-payments (835) e-insurance Identification and Verification (270/271) e-claims (837) e-medicare Remittance Advice (837, 835) e-pharmacy Claims (NCPDP 5.1) Positive impact on Revenue Cycle

11 Overview of VHA Revenue Cycle pre-registration treatment generate intake claim & AR receive post payment revenue e-insurance Identification & Verification (270/271) e-claims (837) + e-pharmacy Claims ( NCPDP 5.1) e-medicare Remittance Advice (837, 835) e-payments (835)

12 The Old Process Paper check payments and Explanations of Benefits were received at each medical center Receipt processing and posting were done manually Deposits were mailed to local banks, which in turn deposited payments with the U.S. Treasury

13 The New Process, in Brief Developed over 18 months; deployed October 2003 Receipt of Electronic Remittance Advices (ERAs) Electronic Funds Transfers (EFTs) Payments go to one Lockbox bank, are then deposited to U.S. Treasury on behalf of VA Payment information and ERAs transmitted to VA Data Center, then routed to VA Medical Centers for AR posting

14 The New Process e-payments

15 The New Process ERAs Payer Transmit ERAs PNC Bank X12 & HIPAA Validate VA Data Center Translate into Flat File Unroutable EEOBs Courtesy Copy of EEOBs Exceptions & Storage Database VA Medical Centers AR Systems

16 The New Process ERAs Pre-parsing & Augmentation of Electronic Remittance Data Identifies payer transactions for appropriate provider Identification invokes normalization rules for each provider Entity identification Provider posting requirements Trading-partner-specific requirements (HIPAA type 7)

17 Payment Process Payers Checks are the predominant payment form for the next 6 to 12 months Goal is EFT: ACH 835 CCD+ or CTX as the standard form of payment Funds are deposited into VA Master Demand Deposit Account upon receipt and swept through accounting deposit process to U.S. Treasury

18 Consolidate & Reassemble ERA Aggregate transactions from all payers & group into payer-specific ERA files for Provider s system Construct file to enable Provider s posting process Transactions are normalized, augmented, edited, and transformed to enable automatic mapping and VA Financial Management System deposit process Consolidated transmission Minimizes upload maintenance and overhead

19 Payment & Data Reassociation Re-associate Electronic Remittance Advice (ERA 835) to the electronic payment (EFT) using Trace Number assigned by Payer Ensure only balanced data is transmitted to receivables system (data & dollars match) Provides internal audit controls to support new electronic system

20 How It s Paying Off

21 Payment Receipt Metric Before e-payments System After e-payments System Percent Improvement Receipt of Payment (with Electronic Funds Transfer) Average time from claim submission to receipt of payment 49 days 28 days 43%

22 Receipt, Matching of Payments Before e-payments System Paper check & EOB received in mail Create spreadsheet of check totals Create deposit slip, mail to local bank After e-payments System No envelopes to open; payment shows up in AR Report created automatically Deposit information received from central Lockbox bank, which deposits checks with U.S. Treasury

23 Receipt, Matching (continued) Before e-payments System Place unposted funds in suspense account Local bank deposits checks to U.S. Treasury Manually locate associated outgoing claim to match payment After e-payments System Receipts automatically placed in holding account Deposit already made by Lockbox bank Overnight process automatically matches payment to outgoing claim

24 Receipt, Matching (continued) Metric Before e-payments System After e-payments System Percent Improvement Closeout of Accounts Receivable receipt & matching of payments Average time to receive payments, match to outgoing claims.89 days.21 days 76%

25 Adjustments to Claim Before e-payments System Navigate through multiple menus After e-payments System No menu-jumping; one-stop capabilities all resources in one spot

26 Adjustments to Claim Metric Before e-payments System After e-payments System Percent Improvement Closeout of Accounts Receivable adjustments to claim Average time to make claim adjustments 3.53 min 2.5 min 29%

27 Weighted Average for Time Savings Task FTE time Avg. time saving Weighted average Receipt & matching.6 76% 46% Adjustments, deposit.3 29% 9% Filing.1 90% 9% TOTAL %

28 Cost Avoidance Metric Before e-payments System After e-payments System Cost Avoidance Cost avoidance summary of task & time savings Automated matching of payments and AR Automated data entry; less rework Automated generation of payment reports Streamlined adjustment process Less paper processing, filing, retrieving -- weighted average across VA sites: 64% time savings for Accounts Receivable & related tasks estimated $2.9 million in annual cost avoidance

29 Summary of Benefits Faster collection, Accounts Receivable closeout Higher cash application rates due to standard data and reduction in A/R days Time & expense savings Reduced data entry time and expense, and paper handling and storage expense Reduced dollars and data re-association efforts

30 Summary of Benefits Reallocation of resources to Revenue enhancement projects Customer service to veterans In addition, remittance advice data enables Better tracking of payments A database for management of claims denials Improved analysis, understanding of our business

31 Why the Project Worked Flexibility among partners Intense communication Innovative field training Post-release field support Plus ongoing enhancements Additional reports Automatic payment search Automatic verification of patient data

32 Next Steps It s the Payers turn Need more 835s (ERAs), more EFTs EFTs, while not mandatory under HIPAA, promise significant time savings Primary challenge is Electronic Remittance Advices (ERAs)

33 Next Steps (continued) VA, as national health care system, does business with virtually all payers (about 1,675) Not all Payers have yet stepped up to the ERA plate (though it s a HIPAA requirement) Keeps both Providers and Payers from reaping benefits of electronic transactions For VA s e-payments system, also affects payback and full use of functionality

34 Next Steps (continued) What VA is doing e-payments Enrollment Team actively recruiting Payers: VA wants YOU! Focusing on VA s top 100 Payers Identifying Points of Contact Enrolling & activating Payers

35 Next Steps (continued) But if Payers aren t complying with HIPAA and joining up VA will request compliance from the Payer VA may pursue legal avenues VA may lodge complaint with CMS, enforcer of ETCS regulations

36 Next Steps (continued) A message to Payers VA is ready to help you with 835s We re up and running with other Payers we can help get you up and running, too Let s get started Our goal compliance without complaints

37 e-payments Last Words VA is helping lead the health care industry from paper to ERAs all the way to EFTs NACHA, the Electronic Payments Association, recently recognized this pioneering role awarding VA the 2004 Kevin O Brien Automated Clearing House Quality Award for our e-payments Project

38 e-payments Last Words Ultimately for all of us in the health care industry it s about moving into the electronic transactions future And for VA, its about continuing to build a sound, more efficient foundation for the support of veterans healthcare

39 For More Information Contact Barbara C. Mayerick Director, Business Development VHA Chief Business Office

40 Thank you